U.S. apartment rents rose from the fourth quarter of 2009 to the first quarter of 2010, by a tiny 0.1% for asking rents and 0.3% for effective rents. This is the first quarterly effective rent increase since the third quarter of 2008, according to a Reis, Inc. report released today. When effective rents (which include perks like free rent and utilities) increase, it suggests that landlords are actually making fewer concessions to tenants—and they are paying off.

While effective rent was up from the previous quarter, it was still down 2.3% compared to the first quarter of 2009. However, that’s much better than the 5.6% decline we saw from 2008’s to 2009’s first quarter. This dramatic change indicates a reversal in rent decreases.

Strong markets that saw rent increases include Miami, New York City (the most competitive apartment market in the U.S.), Colorado Springs, Washington, DC, San Antonio, and Dayton, OH. Continued struggles were seen with lowered year-over-year rents in Las Vegas, San Jose, and San Francisco.

In Miami, effective rents for the first quarter gained 1.6% to $1,008 per month, and in New York, the gain was 0.9%, to $2,667 per month.

Vacancy rates remained unchanged—at the record level of 8%—during the first quarter. However, no increase can a sign the market is at or approaching the bottom of the vacancy pit and recovery is on the horizon. In New York City, vacancies even fell 0.1% to 2.8% from the previous quarter.

What about new construction? Well, 22,000 new apartment units opened in 2010’s first quarter, and their vacancy rate was a whopping 52.8%. And in 30 of the 79 markets studied, vacancies rose. But large investors are again looking at developing apartment properties—perhaps anticipating increased demand for next year.

Looking at the overall 1st quarter picture, it’s much brighter than reports were throughout 2009, so it’s possible that the apartment market will be on its way to recovery this year—as long as the economy picks up some steam, and some jobs.

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